DOJ Seeks Expanded Forfeiture Powers Disguised As "Reform,"
     
- by Judy Osburn, F.E.A.R. Chronicles, Vol. 2 No. 2 (July 1994)

When HR 2417 and HR 3347 (Reps. Hyde's and Conyers' forfeiture
reform bills) were forwarded to the House Judiciary Committee last
October, Attorney General Janet Reno wrote letters requesting House
and Senate Judiciary Committee Chairmen to delay hearings on the
bills until after the administration submits its own proposals. In
an article published by the Justice Department last September a DOJ
attorney expressed hope that Reno's request would forestall efforts
"to attach any of [Conyers'] forfeiture provisions to the pending
anti-crime bill."1 

As of press time there is still no offering from the Justice
Department, however, the Department will announce their plan for
"reform" soon. F.E.A.R. obtained a draft of DOJ's "Forfeiture Act
of 1994." Though still unsigned, it is expected there will be no
major changes when their offering is officially submitted. 

The government's proposal alleviates a few procedural obstacles for
property owners, but for the most part it expands government powers
to seize assets. "This bill is overwhelmingly a prosecutor's wish
list," says David B. Smith, a former DOJ Attorney who headed the
asset forfeiture program and now works for forfeiture law reform.

The Justice Department's proposed bill would require the government
to prove its case by a preponderance of the evidence in all
forfeitures. The government's concession to shift the burden of
proof from the defendant to the plaintiff is only a slight
improvement over present law, since civil forfeitures are already
governed by the preponderance standard of proof (i.e.
more-likely-than-not). The only difference would occur in the rare
case where neither party's evidence even slightly outweighed that
presented by the other party. Then the evidentiary "tie" would no
longer go to the government. 

The major effect of this provision is that prosecutors would no
longer be allowed to use hearsay testimony at trial, an advantage
over the claimant the government presently enjoys. However, the DOJ
would preserve, and even expand, its ability to rely on hearsay
evidence through other provisions that would extend further
criminal prosecuting authority to civil forfeiture actions. 

Government lawyers would be empowered to issue a civil equivalent
of a grand-jury subpoena (without the court supervision that
governs criminal indictment procedure), and then introduce secret
grand-jury testimony in civil forfeiture proceedings. Such
testimony is hearsay and is generally not admissible evidence.  The
Justice Department would also expand access to IRS tax information
to civil forfeiture investigators, and require property owners to
waive foreign bank secrecy rights in order to contest a forfeiture.


Another section of the Justice Department's bill would require
property owners to meet a "uniform standard" for establishing an
innocent owner defense that effectively negates the innocent owner
exemptions already contained in the major forfeiture statutes.
Under the government plan innocent owners must prove they did "all
that reasonably could be expected" to prevent the illegal use of
their property, or to avoid acquiring tainted property. 

This is the burdensome standard for proving innocence devised by
the Supreme Court in 1974 for a forfeiture based upon a statute
containing no innocent owner protection whatsoever. There, the high
court ordered Pearson Yacht Leasing Company to forfeit a rental
yacht on which one marijuana cigarette was found. The justices
declined to explain what the company could have doneÄ"reasonably"
or otherwiseÄto prevent the illegal use of their vessel,
considering the owner had no way of knowing that customers brought
a small amount of contraband on board. The company had even taken
the precaution of including in the contract a stipulation that the
lessee would not use the yacht for illegal activity. 

The Justice Department correctly notes that some forfeiture
statutes presently contain no innocent owner protections at all,
and courts are split as to what constitutes innocent ownership when
the law does provide such an exemption. However, under the guise of
expanding and standardizing innocent owner protections, the
government's bill would codify the harshest interpretation of civil
forfeiture's imposition of liability for the covert acts of others
upon property owners. "This would severely dilute the protections
for innocent owners currently found in the most important civil
forfeiture statutes," says Smith.

"The government has made it easier for claimants to get into court
and easier to prevail on the merits of their claims," Michael
Zeldin, another former head of DOJ's Asset Forfeiture Office, says
of the Department's recommendations. "But for that benefit, the
government wants certain things for itselfÄexpanding its tools of
forfeiture." 

The DOJ would extend the time limit owners have to file a claim
from 20 to 30 days. It would also place a 90 day limit from the
time of seizure for the government to initiate legal action.
Presently property owners are left without any legal recourse for
months or even years while the government delays filing a judicial
complaint for seized property.

On the other hand, civil and criminal forfeiture would be expanded
to include the proceeds of every Title l8 violation. These federal
crimes encompass a wide range of violations, from serious felonies
to misdemeanors such as defacing a coin or impersonating a 4-H Club
member. Other offenses include misstatements or concealment of
facts on credit applications and various government forms.  



The government would also broaden the Immigration and
Naturalization Service power to seize conveyances used to transport
or harbor illegal aliens to include all property, both real and
personal, used or intended to be used to smuggle or harbor aliens,
as well as all property which constitutes or is traceable to
proceeds of transporting or harboring aliens. Farmers who have no
way of recognizing counterfeit "green cards" could loose their
ranch for unknowingly hiring an illegal alien.   

Forfeiture would also be attached to IRS cash transaction reporting
requirements for businesses. Neglecting to file, or a mistake in
filling out the reporting forms, could result in loss of one's
business. Attorney fees paid with legitimate income would be
forfeitable if the attorney refuses to include the name of the
client on the IRS reporting formÄattorney-client information that
lawyers are required to omit in at least nine states, absent a
court order.

DOJ would expand forfeiture of property used, or intended to be
used to facilitate a drug crime to include all proceeds traceable
to the property used, or intended for use in facilitating a crime.
The owner of a car used to transported a small quantity of drugs,
even for personal use, who later sold the car and used the money to
purchase a new car would forfeit the entire new car. Besides the
draconian results this proposal would produce, it is easy to
envision forfeiture squads hovering around new car dealerships in
hopes of finding (or planting) evidence of drugs in the trade-in
vehicles.

The DOJ wish-list would create an "adverse inference" against a
property owner who invokes the Fifth Amendment privilege.
Protection from self-incrimination was one of the very few
constitutional limitations held applicable to civil forfeitures
until 1993, when the Supreme Court extended additional Bill of
Rights guarantees to property owners.  "It's an important point,
because the Fifth is frequently invoked in forfeiture cases since
there is often a parallel criminal investigation," says Smith.

The Justice Department would also incorporate into civil
forfeitures the "rebuttable presumption" that now governs criminal
forfeiture proceedings, by which property is presumed to be
proceeds of a drug trafficking or money laundering offense if the
government establishes by a preponderance of evidence that it was
acquired while the owner was engaged in illegal activity (or
"reasonably thereafter"). 

Presently, there must be proof beyond a reasonable doubt that the
defendant actually committed the offense before this "rebuttable
presumption" comes into effect. The government wants to preserve
the presumption of guilt in civil "proceeds" forfeitures by
extending the rebuttable presumption used in sentencing convicted
criminals to civil forfeitures. Property would be presumed to be
proceeds of a criminal activity even if there is no clear proof a
crime was ever committed.

The government would eliminate the opportunity for third parties in
criminal forfeiture actions to prove they, rather than the
convicted defendant, rightfully owned the property at the time it
became subject to forfeiture. Currently, owners who have not been
charged or indicted with any crime, but whose property is the
subject of a criminal forfeiture order, can obtain relief from the
court if they prove they had a "right, title or interest" in the
property that was "superior to any right, title or interest of the
defendant" at the time the crime was committed. (Though they are
not allowed to participate in the criminal trial, present their
interests to a jury, nor other protections afforded  to criminal
defendants.) Under the DOJ's proposal third parties could lose
their property without ever having a chance to prove to the judge
that the property was theirs, and not the defendant's. 

The Justice Department's plan would create an automatic personal
judgment against third parties in all forfeiture actions for the
value of their interest in the property. Anyone who obtains an
asset from a defendant (including bankers, car dealers, creditors
and purchasers) would be personally liable to the government for
the value of any asset they received from the defendant. In effect,
the government would have a hidden civil judgment on all
transferred property in case it becomes forfeitable at some later
date. This would wreak commercial havoc, since a business rarely
receives notice that an individual with whom it is conducting
commerce will later become a defendant, at which time the business
must pay the government the value of the assets for which it
already paid.

The government would also allow summary forfeiture of unregistered
firearms. DOJ would eliminate "useless but costly forfeiture
proceedings," whereby gun owners have an opportunity to prove their
confiscated weapon was in fact legally registered or does not fit
the technical definition of a gun that must be registered. A
valuable collection could be forfeited from a law abiding gun
enthusiast or dealer without notice or the owner's chance to be
heardÄnot even by the seizing agency. 

Though the government seeks to greatly expand its license to steal,
the Justice Department makes an important admission regarding the
burden of proof in its Section-By-Section Analysis of its proposed
bill. DOJ acknowledges that a change from the current placement of
the burden of proof "is warranted in light of recognition by the
courts that the civil forfeiture actions are punitive in nature."2
This is a strong argument for requiring proof beyond a reasonable
doubt that the property owner committed the relevant crime. Yet the
government argues for the continuation of imposing punishment on
people caught up in civil forfeiture proceedings without clear
proof that the owner was ever involved in a crime. 

The government attempts to explain the incongruity of using two
different standards of proof to inflict punishment by arguing that
most criminal forfeiture actions are presently governed by the
preponderance-of-evidence standard, "like other sentencing
issues."3 Even if this were true, the Justice Department did not
attempt to explain why the more-likely-than-not standard of proof
used in "sentencing issues" should be used to impose punishment on
civil defendants who have never been convicted of a crime. DOJ
would maintain civil forfeiture's current Through-the-Looking-Glass
standard of imposing a sentence without any criminal conviction.

The DOJ's proposed Forfeiture Act lacks any of the reforms
contained in either Reps. Hyde's or Conyers' forfeiture reform
bills. Instead, under the guise of reform legislation, the
government proposes that Congress enact amendments that would make
it even easier to forfeit property from law abiding citizens, and
expand forfeitures to include a myriad of crimes and misdemeanors.

1. "Congress Considers Forfeiture 'Reform'ÄWashington and Conyers
Bills Appear Aimed at Eliminating Civil Forfeiture," Asset
Forfeiture News, September-October 1993, page 17. 

2. DOJ section-by-section analysis of the forfeiture act of 1994 at
page 16, citing Austin. v. U.S. 113 S. Ct. 2801 (1993).

3. Id. at page 29. 

ÄJudy Osburn